Li Ning sponsors CBA encounter "wearing shoes" Hao throw 2 billion launch brand self-help strategy

There is a saying that "when a person is unlucky, drinking cool water will block teeth." Originally, Li Ning, a company that hoped to fight for a turnaround in the sponsorship of the CBA, was unexpectedly caught up in the CBA season. The Chinese Basketball Association recently issued a ticket for 12 players who did not wear shoes sponsored by Li Ning in the game. This made Li Ning, which intended to act according to the contract, be criticized.

Sponsorship of sporting events is usually a relatively safe short-cut for sports brands to open up the market, but for the troubled Li Ning Company, if Hao throws two billion yuan to sign a five-year contract, can the sponsored CBA events achieve the desired effect? , I am afraid it is really an unknown number.

Li Ning sponsored CBA encounter "wearing shoes"

On June 11 of this year, Li Ning disclosed that it has signed a cooperation memorandum of equipment sponsors with the China Men's Professional Basketball League (CBA) and said that the agreement covers five seasons from 2012/2013 to 2016/2017. Market rumors that the sponsorship of the five-year contract will reach a record of 2 billion yuan.

The reason why Li Ning generously invested 2 billion yuan in sponsoring the CBA was obviously a hope that this event, which has attracted more and more basketball stars, could become the best platform for the re-emergence of the Li Ning brand. However, when Li Ning was full of hope for the future, an unexpected storm occurred.

On the evening of November 24, the CBA league was unveiled in the 2012~2013 season. In the following days, the Chinese Basketball Association opened its first ticket for the new season. For the first round of the match, no sneakers provided by the league equipment sponsor Li Ning were required in the game. Marbury, Wang Zhiyu and other 12 players were reportedly criticized and each person was fined 20,000 yuan.

For a time, players, fans, and netizens all questioned Li Ning's "overlord terms". The "shoe conflict" between players and sponsors has become increasingly fiercer.

When Li Ning Company responded to NetEase's inquiry, it said, “In terms of product wearing, Li Ning supports the regulations set by the Basketball Association and also believes that a league that respects the interests of sponsors will be more professional and can develop in the long term.”

Li Ning stressed that "As the official partner of the CBA league, Li Ning is in the process of assuming the responsibility of the official sponsors and fulfilling the obligations of the official sponsors. It is based on respecting the resolutions of the Chinese Basketball Association and supporting the development of Chinese basketball. ".

Although Li Ning insisted on ignoring its own role in the current turmoil on the grounds of “respecting the rules of the Basketball Association”, in the midst of public opinion, Li Ning’s inevitability of “lying shots.”

Zhu Xiaodong, general manager of Eurosun Sports Culture Communication Co., Ltd., told NetEase that the controversial CBA “overlord clause” cannot actually be counted as Li Ning’s “original creation”. As early as the beginning of the cooperation between Anta and the CBA, that clause existed. "This clause was jointly proposed by ANTA and CBA. 17 clubs nodded in agreement. Li Ning paid for brand endorsements for players who used to endorse the competition. This cooperation with CBA only followed the restriction clause of the year."

Why the "wearing shoes incident" can cause such a big storm, Zhu Xiaodong believes that during the previous Anta cooperation, there must have been similar incidents. Communication between them will be resolved, but this year is different from previous years. On the one hand, Li Ning is heavily laden with gold. Casting to the CBA has attracted the attention of the CBA. "On the other hand, it does not rule out the irritations of some other sports brands."

Hao throw 2 billion launch brand self-help strategy

Shortly after the “wearing shoes” incident, Li Ning’s publicly stated that it is willing to customize the shoes for any CBA player’s foot, which can fully meet the individual needs of the players. But in any case, Li Ning, which has made a lot of money, obviously wants its sponsors' rights to be maintained.

Li Ning's insistence and the fact that the Basketball Association is really clear are all due to the huge sponsorship contract this summer. Shortly after the signing of the equipment sponsorship contract in June, people close to the Basketball Association revealed that “Li Ning invested RMB 2 billion in sponsoring the CBA for five years.”

Two billion yuan in five years, which is equivalent to Li Ning’s annual payment of 400 million yuan to CBA. Although the sponsorship fee is made up of cash and sports equipment, the sponsorship amount is still the highest in the history of the CBA.

However, Li Ning Company recently responded to Netease Finance's question when asked about this figure. Relevant person in charge of Li Ning Company repeatedly stated to NetEase.com that due to the consideration of relevant commercial terms and trade secrets, the sponsorship amount will not be disclosed.

It is understood that when Anta became the first sponsor of CBA in 2004, the contracted amount was 60 million yuan for three seasons, equivalent to 20 million yuan each season. Now, eight years later, the amount of sponsorship has turned 20 times. A well-known sportsperson bluntly said, “This has pushed the CBA's sponsorship to an unprecedented level.”

Zhu Xiaodong, general manager of Eurosun Sports Culture Communication Co., Ltd., believes that the reason why Li Ning Company “killed with money” is seeing the sweet taste that ANTA has tasted after sponsoring the CBA event. According to the data, when Anta cooperated with CBA for the first time in 2004, its turnover was 310 million yuan. In the following years, the turnover was: 670 million yuan, 1.25 billion yuan, 2.98 billion yuan, 4.63 billion yuan, 5.87 billion yuan, By the end of 2011, the figure of 8.9 billion yuan will almost double every year.

In addition, Li Ning Company also mentioned in its reply to NetEase's e-mail that “CBA events have good brand value and commercial value.” CBA helps improve Li Ning’s overall brand value and promotes its overall business development.

According to NetEase Finance, in June 2010, Li Ning proposed a brand remodeling plan and shouted a new slogan for Make the Change. However, the changes that followed were the decline in orders due to overstocking of products and poor pipelines. At the same time, the new brand appeal of “Post-90s Li Ning” has also been criticized by industry insiders.

Li Ning’s transition has also been trapped in a “quagmire” and the company’s performance continued to decline in 2010 and 2011. According to the company's 2011 annual report, operating revenue reached 8.92 billion yuan last year, a decrease of nearly 500 million yuan from the previous year, and net profit was only 386 million yuan, which is less than half of the 880 million yuan in net profit at the bottom of the five sports brands.

In addition, Li Ning was overwhelmed by the high inventory. According to statistics, Li Ning’s inventory for the previous year was 1.133 billion yuan, an increase of 40.64% from 2010’s 806 million yuan, and inventory turnover days had also increased from 52 days in the previous year to 73 days.

In this case, Li Ning announced on the morning of July 5 this year that the Chief Executive Officer Zhang Zhiyong had retired since July 4 and no longer served as a member of the Executive Committee of the Board of Directors. At the same time, Li Ning, founder of the company, once again returned to public view and personally managed Li Ning.

Li Ning’s public relations department told NetEase that after Li Ning himself returned to Li Ning Group, he made a major strategic adjustment and put forward three focuses, “focusing on core brands, focusing on core businesses, and focusing on the core market”. The sponsorship of CBA is positive. It is the essence of returning to sports and a concrete embodiment of three focusing strategies.

Loosing basketball strategy is still waiting for market test

Ma Gang, an independent commentator for the apparel industry, pointed out to NetEase.com that basketball equipment has always been one of Li Ning’s main products. Since Li Ning proposed “three focuses” in July this year, its “partial professional” transformation has been obvious. Obviously, Li Ning has changed from the field of track and field, outdoor and leisure, etc., to the specialized fields of basketball and badminton."

According to NetEase Finance, Li Ning has made significant efforts in the field of basketball in the second half of this year. Li Ning also signed a contract with NBA Heat star Devine Wade after heavy sponsorship of the CBA. According to industry sources, the endorsement contract is as high as With a total amount of 100 million U.S. dollars, Wade will receive 10 million U.S. dollars in annual compensation for a period of 10 years. At the same time, it will also receive shares in Li Ning.

According to survey data, China currently has 465 million young people, about 300 million of whom play basketball, and the majority of young people aged 15 to 24 are basketball fans.

Li Ning Company frankly stated that “Basketball has a large business scale in China, and basketball category is also one of Li Ning’s most important business categories. We must have sufficient resources to support the development of its business, whether it is signing CBA or contracting Wei. Germany is out of this consideration."

Li Ning also introduced to Netease Finance. The Li Ning Group announced a new “Three-Stage Change Blueprint” plan in early July of this year. The main objective is to improve the company’s core strengths and profitability. “Currently, the company has begun to implement pipeline inventory improvement and product improvement. And the operational cost structure, strengthening organization and execution capabilities, improving channel efficiency and profitability, focusing on core products and the domestic market, and strengthening brand investment and other short-term measures in terms of strategy and business."

For the next step, Li Ning’s public relations department said that the second phase of the trial stage is expected to be carried out from 2013 to 2014. The main goal is to “strengthen the leading market position of the Li Ning brand in the Chinese sportswear industry”.

However, for the reform plan put forward by Li Ning, Ma Gang expressed a different attitude. He pointed out that Li Ning's transition is more difficult, not a few focus, several blueprints can be solved. “Like the sponsorship of CBA events today, it is only possible to enhance the brand and reputation, but the real decision to change Li Ning's success is in its market-to-product match level and the level of health operations of all agents,” said Ma Gang.

Zhu Xiaodong pointed out that the “CBA shoes-wearing incident” pointed out that although the incident caused certain twists and turns for Li Ning’s sponsorship of the CBA event, Li Ning needed to resolve what it was like to present to the fans what kind of Li Ning he wanted.